Ottaviano, Gianmarco
(1997)
Integration, Geography and the Burden of History.
Bologna:
Dipartimento di Scienze economiche DSE,
p. 14.
DOI 10.6092/unibo/amsacta/5027.
In: Quaderni - Working Paper DSE
(283).
ISSN 2282-6483.
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Abstract
This paper develops a simple two-region two-sector general equilibrium model of trade and migration where one monopolistically competitive sector generates local pecuniary externalities. The aim is to gain insight on the question whether economic integration can be expected to increase the differences in industrial structure between more and less developed regions. It is shown that a reduction in trade and/or migration costs weakens the lock-in effect of historical events while strengthening the role of expectations.
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